All Forum Posts by: Matt Devincenzo

Yeah you will definitely not be looking to a wholesaler. You need to find a good real estate agent and look at close to move in ready properties. I say that because with 3.5% down I'm assuming you're looking at an FHA/homepath type mortgage and those have additional inspections that require almost nothing wrong with the property.

As far as wanting to know if it's a deal that is a little more complicated. Start by reading about the 50% rule here on BP. But also understand that finding a property that will fit that criteria in NJ might be tough (I'm assuming it is an expensive market compared to rent rates). That is how it is out here in CA which is why I choose to rent a duplex here even though I own 5 properties in FL, I can rent cheaper than I can buy out here.

Decomposed granite isn't bad out her in CA it's usually what they use in any sort of desert/low water landscaping. Think of a rock garden with the sand in it, that's basically what DG looks like. It will definitely be low cost as far as not needing water or mowing.

If the tenants want it great, have them pay to install it unless you've already agreed to the cost otherwise it's just an expense that doesn't get more rent so you don't need to do it. If your concern is future expenses with it, you really shouldn't have any so I wouldn't be concerned there.

Yes, usually when you refer to wholesaling the idea is that you are tying up a property and marketing your contract to an investor that will "buy" your contract whether that be via assignment, double close ect.

All the wholesalers I know are very clear Cash and Hard money only. Conventional financing is usually not going to work, the reason being you are getting a deal on a property usually because of 2 things 1) you're closing quickly (which conventional is hard to do with appraisals ect) 2) the property is not in a condition that a lender will finance because it is distressed.

Also most lenders will not cover your assignment fee so the buyer would have to have cash to pay for that portion if you could even do a wholesale to a financed buyer.

Watch out on your pooling funds in an entity to purchase statement, it's likely by doing so you will be running afoul of SEC securities requirements which is a whole other discussion.

This is true in every state so far that I know of, however municipalities have nipped the flipper "owner builder" permits by saying that it must be OO for a minimum of 1 year or something similar. So you might get away with doing one that way but I bet someone will catch on and you'll end up in some hot water for pulling permits on a resale.

Welcome Luis Chavez, try the search feature up in the right hand corner of the page. There are tons of threads dealing with the ins and outs of this.

The long and short of it is if you are really wholesaling you have a signed contract with the seller, meaning they can't back out and sell to someone else. If you don't have a signed contract then you're not really wholesaling you're unlicensed brokering which is a no no. But search up there and you'll find lot of info.

Sorry I didn't clear that up P&S, I meant purchase and sale agreement. Basically the same thing you signed buying before only difference is the realtor walked you through "sign here initial here sign sign date" otherwise if you use your state realtors standard contract it's the same to purchase any property.

Open escrow (could be different terms depending on the state) take your signed agreement to a closing atty, title company or whatever is used in your state and have them start the process to close the deal. When they are doing everything they'll start working through the who owes what to whom part and tell the owner and you. If your purchase agreement states the owner must provide clear title then if he can't or doesn't want to(because it's too expensive) then you can walk. The other option is to put say a 30 day option to purchase on the property, you now have 30 days to figure out if you need to adjust your price or walk away.

Obviously the BK complicates things and K. Marie Poe is going to be a better authority on how to deal with that since she has actually dealt with these things before. Like she said though you'll either get a good deal out of this or a great education on how the process works either way I'd follow it through to learn as much as you can.

If it's still deeded in the owner's name then he is the one that can sell it not the bank. So I would enter into a P&S with the owner take it to a title company and open escrow so you now have an equitable interest. Now the title company will pull title and by so doing know who the lender is and what the payoff is. Then you can start figuring out what you need to do(likely a SS since the fees and interest has built up to quite a sum by now I'm sure). Good Luck.

Michael Immordino that is incorrect. Only the interest portion of a mortgage payment is deductible. Said another way the interest portion is pre tax dollars the principle will be post tax dollars so paying down the loan will not benefit you from a tax perspective. If anything it will be negative in that you will reduce your interest expense and therefore your deduction that you could take.

I keep it to reinvest into another property or now I'm looking at notes so it may start going to that soon.

Here is the reasoning, if I pay down my principal at 3.5% that $100 is essentially giving me a return(saved interest) of 3.5%. Now since my rentals are producing about 12-16% CoC then I've effectively cost myself 9.5-12.5% return on that money. That is definitely not how I want to invest. So I save it as a fund towards my next investment this is because I have a good W-2 job still so my RE money doesn't get touched yet it's for growing a passive income for me in the future so I can retire before I'm 30 haha (that's the plan at least)

I think to Mike Franco's reasoning, you can state what ever you want in the lease, but since it is an illegal conversion that you knowingly did to circumvent the laws, then it is also not a binding legal agreement. Also you'd have an illegal kitchen, since I doubt the city would issue the permit for a second kitchen without an explanation so now you're open to code violations ect.

You can ask a RE attorney to be sure, but I think you'll find you don't have a leg to stand on if anything happens.